Manitoba Telecom to sell fiber optic network to Accelero

Fri May 24, 2013 8:51am EDT
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TORONTO May 24 (Reuters) - Manitoba Telecom Services Inc said on Friday it has struck a deal to sell its Allstream business, a fiber optic network stretching across Canada, to Accelero Capital Holdings for C$520 million ($502.8 million), including debt assumed by the buyer.

Winnipeg-based Manitoba Telecom last year said it had begun a wide-ranging strategic review of its Allstream business that could result in the sale of the unit.

"This transaction makes MTS a stronger, more focused and more valuable company," Chief Executive Pierre Blouin said in a statement. "MTS goes forward as a pure-play telecom with a strong consumer franchise and significant free cash flow to support our dividend."

The deal will provide MTS with sufficient capital to invest in wireless spectrum and to continue bringing fibre-to-the-home, 4G LTE wireless technology and other products to communities in Manitoba, the company said.

After closing costs, MTS said it expects to realize net proceeds of about C$405 million from the deal with Accelero, an investment and management group focused on telecommunications, digital media and technology.